Business & Finance: Lucky Distillers

U.S. liquor production will stop completely on or before Nov. 1. This jolting news hit front pages all over the country last week when prim, precise WPB Alcohol Expert Matthew MacNamara revealed that U.S. distillers would be 100% converted to war alcohol within two months. The U.S. needs alcohol for its huge synthetic-rubber program, its booming smokeless powder plants, its busy plastics and chemical factories.

On top of this bad news for U.S. conviviality the W.C.T.U. abruptly suggested that present liquor stocks be converted into undrinkable commercial alcohol. Drinkers did not have to take the ladies seriously—converting present whiskey stocks would take too long.

Although there is an adequate liquor supply for a medium term war (warehouses bulge with enough to last four years), some changes in drinking habits are on the way. Both gin and blended whiskies will presently disappear. Straight whiskey alone will remain. A proposed $2-a-gallon Federal tax boost would end the sale of popular dollar-a-pint whiskies, forcing many to drink cheap beer and wine.

Because a single rifle shot blows up enough alcohol to make a stiff cocktail and more than four gallons go into making a single synthetic tire, the U.S. will use 476,000,000 gallons of commercial alcohol next year, four times any pre-war year. Most of this huge increase will be met by the liquor makers, who have an estimated capacity of 435,000,000 gallons annually. If things go as planned, the liquor industry will supply the newly developed war alcohol market (rubber and powder) and regular alcohol producers will handle the ordinary market (plastics, lacquers, chemicals, anti-freeze).

The liquor companies lose nothing by this deal. Main reason: when they started commercial alcohol production last December they got OPA to boost prices from 24½ ¢ to 50½ ¢ a gallon. Results have been fine. Six months’ profits of the four biggest distillers—Distillers Corp.-Seagrams, Hiram Walker, National Distillers, Schenley Distillers—jumped 40% to a smacking $14,814,000 after taxes. At the same time combined earnings of 290 bigtime U.S. industrials dropped 35%. Moreover, the liquor industry may get “vacations” from war work to rebuild depleted stocks. Otherwise it might be out of business after the war while it waited for new whiskey to age. Thus, if this war does not stir up another wave of prohibition, distillers can count themselves lucky.